Phil Whitehouse, head of The Mortgage Alliance (TMA)

Monday 17th January 2011
While many had the misfortune to be laid low with man flu, swine flu or even the plain old common cold over the festive period, it appears that something has stirred certain elements within the Government which has made them come out of the New Year blocks with more guns blazing than James Bond on any given Bank Holiday.

David Cameron has followed the lead initially set by housing minister Grant Shapps by reportedly ‘slamming’ banks and building societies for holding back the housing market with overly strict lending. According to a Daily Mail report, Cameron is said to have cited mortgage lenders as being too cautious and therefore preventing the housing market from progressing. However, in typical political rhetoric, he also called on lenders to return to ‘respectable’ lending in order to stimulate growth.

It is a positive thing that such a high profile and powerful voice is highlighting these important and relevant matters. However, I can’t help but think that whilst the language being used is certainly not too far off the mark, it does smack of a lack of real understanding of the problems being faced and underlines the lack of ideas on how to actually help solve these issues.

In another well-publicised move, Grant Shapps announced that he is due to meet, or maybe has already met, with Hector Sants, the head of the Financial Services Authority, to discuss the Mortgage Market Review (MMR).

In a recent interview with the Financial Times, Shapps suggested that he will urge the regulator to make sure its regulations would not block would-be homebuyers. Shapps has previously hit out at the MMR, saying the regulator’s measures must be “proportionate” and “avoid unnecessary prescription.”

Of course the MMR hangover will continue for some time and we, as an industry, can ill-afford to turn a blind eye to its potential implications. Indeed, integral components concerning the industry remain regulation, funding, affordability and mortgage availability.

Affordability was at the crux of new research from Equifax which suggests that 36.8% of those who had applied for a mortgage in 2010 indicated that they had found it difficult to get a competitive deal.

However, whilst this is still a relatively high number, this actually represents just under a 10% fall in the number of applicants who were said to be having difficulty accessing good credit deals in 2009 (45%). So in essence this is not really bad news, but it is clear that this statistic remains far too high to have any real impact on aiding market recovery, especially when compared to the 23% statistic registered in 2008.

These figures underline the drastic need for some positive government intervention.

Unfortunately, the reality is that it is still very much a grey area as to exactly what measures can be taken to ensure lenders lend and potential buyers can have access to affordable property.

These remain the million dollar questions, but a balance certainly has to be bridged sometime soon if the market is to be revitalised in a meaningful way to help those growing numbers of potential borrowers currently sitting on the periphery. Unfortunately answers to these questions are not easy to come by and as a result these will undoubtedly remain issues that will continue to blight the intermediary market in the year ahead.

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Editorial Contact Details - Rosalind Renshaw
rosalind.renshaw@introducertoday.co.uk

0845 075 0152

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